Long-Term Care Crisis in South Dakota

Nationwide, long-term care facilities and home health agencies have experienced staffing problems and increased labor costs as the COVID-19 virus crisis continues. Plus, fewer people are looking for work and there are more job openings than people. In addition, with vaccination requirements, some workers will not take a job if they must be vaccinated for COVID-19.

South Dakota is being hit hard as the labor shortage affects all businesses, especially in long-term health care, where there has always been a challenge to recruit employees for nursing homes, assisted living facilities, and other long-term health care services.

A story published in South Dakota News Watch reported that the South Dakota Health Care Association says payrolls for long-term health care facilities increased to nearly $60 million as they lost $60 million in revenue. Revenue losses are due to reduced resident admissions.

People Fled LTC Facilities During COVID - Placing Pressure on Families

The entire industry saw an outflow of care recipients from long-term care facilities during the COVID-19 pandemic. Family members became caregivers either because they were unable to find or afford in-home caregivers. Home health agencies are also finding it hard to keep and attract caregivers, and salaries are increasing due to demand for care and lack of staffing. 

Nate Schema, vice president of operations for the Evangelical Lutheran Good Samaritan Society, which operates long-term care facilities, quoted in the story, said that the workforce shortage is creating new obstacles.

"You're going to have to move your loved ones further and further away from the communities they may have called home for 50-plus years," said Schema.

Unprepared and Untrained Adult Children Became Caregivers

Genworth Financial completed a survey that shows the impact this crisis is having on American families. For many families, adult children became caregivers and had to find a way to balance working from home and caregiving. 

One in three Americans unexpectedly became caregivers - spending an additional nine hours a week on their caregiving responsibilities. You can imagine the physical and emotional impact that caregiving is placing on these family members. 

In South Dakota, long-term care facilities are turning away prospective residents. An LTC NEWS survey of home health agencies in South Dakota shows that the availability of providers is a significant problem, and costs are increasing.

LTC Costs Increasing but Caregivers Still Underpaid 

Despite increasing labor costs, long-term care providers are still underpaid today as other employers dramatically increase their salaries. The average front-line patient-care position in a long-term care facility is being paid about $14.00 an hour, and fast-food outlets are now offering as much as $16.00 an hour for entry-level positions. 

The LTC NEWS Cost of Care Calculator shows the average base cost of an assisted living facility in Rapid City, South Dakota, in 2021 as $47,100 a year. Surcharges will add to the base cost depending on the number of services the care recipient requires. 

Nursing homes cost much more, with the current average cost running $105,120 a year for a private room, less for a semi-private room.

In-home care is averaging $61,776 a year (based on a 44-hour week). South Dakota has always been an expensive state for home health care due to the small population and people living outside major population centers. 

Higher Demand Already Increasing Costs Nationwide

The costs for all types of long-term care services and supports were already increasing due to higher demand. However, the labor shortage and increased labor costs may increase these costs much faster than the inflation rate - Bipartisan Commission Reports LTC Costs Rising | LTC News.

Many families are unaware health insurance, including Medicare, does not pay for most long-term care services. Medicaid will pay for long-term care services in a facility but only if the individual has little or no income and assets. 

Long-Term Care Insurance will pay for all levels of care in all settings, but you cannot purchase a policy when you need care. Experts say too many people ignore the problem until there are few, if any, available options for planning.

Most people are purchasing LTC Insurance in their 50s, but most people don't think about it until there is a crisis.

Medicaid Reimbursements Low

Since many families fail to plan, they end up on Medicaid. In South Dakota, the 2021 Medicaid reimbursement per day rate for a nursing home is much lower than all Great Plains states

• South Dakota    $158.54
• Iowa                 $174.42
• Wyoming          $186.99
• Nebraska          $203.03
• Montana          $211.42
• Minnesota        $270.00

Compare the Medicaid reimbursement rate with the average cost of a private-pay nursing home, and you can see the funding problem. The South Dakota Medicaid rate is about $4822.26 a month compared to the average cost of $8,243 a month for a semi-private room.

High labor costs and low state reimbursement rates add up to a financial shortfall. Better facilities will welcome private pay and Long-Term Care Insurance residents first who pay the full bill.

Advance Planning Offers Choice and Control

Whether you live in South Dakota or elsewhere, planning for future long-term health care will give you access to your choice of quality care services in any setting. Most research studies have shown most of us do not want to place the burden of caregiving on our adult children as they have their families and careers. 

However, with increasing costs of long-term care services nationwide, protecting income and assets becomes essential for retirement planning. Even families with substantial savings are concerned about the financial and emotional impact of long-term care. Preparing their family and finances for the costs and burdens of aging and changing health should become front and center for more families.

Partnership LTC Insurance - Asset Protection

South Dakota, like most states, has an active Long-Term Care Insurance Partnership Program in place. With a qualified Long-Term Care Insurance policy, the policyholder obtains additional dollar-for-dollar asset protection - What is a Long-Term Care Partnership Policy? | LTC News.

Even a small policy can provide asset protection and access to quality care. However, the first step is to obtain coverage, and that should happen when you still have reasonably good health. Find an experienced Long-Term Care Insurance specialist who works with the top companies to help you find appropriate coverage - Work With a Specialist | LTC News.

The problem of long-term care is not going away. An aging population, fewer available caregivers, increasing costs, and stress and anxiety placed on your family adds up to a family crisis unless you are prepared ahead of time.